ARG-090

The following appeared in a memo from the vice president of a food distribution company with food storage warehouses in several cities.

"Recently, we signed a contract with the Fly-Away Pest Control Company to provide pest control services at our warehouse in Palm City, but last month we discovered that over $20,000 worth of food there had been destroyed by pest damage. Meanwhile, the Buzzoff Pest Control Company, which we have used for many years in Palm City, continued to service our warehouse in Wintervale, and last month only $10,000 worth of the food stored there had been destroyed by pest damage. Even though the price charged by Fly-Away is considerably lower, our best means of saving money is to return to Buzzoff for all our pest control services."


Write a response in which you discuss what questions would need to be answered in order to decide whether the recommendation and the argument on which it is based are reasonable. Be sure to explain how the answers to these questions would help to evaluate the recommendation.


In this memo, the vice president of a food distribution company states that comparing the pest control services by two different companies at two of their warehouse locations—Fly-Away Pest Control Company (F) at Palm City, and Buzzoff Pest Control Company (B) at Wintervale—they noticed monetary differences in pest damage and urges to terminate their cooperation with F to save money. Plausible as the author’s conclusion may appear, in order to fully evaluate the writer’s proposal, we need to ask more questions and the answers to these questions might help us settle on the ultimate decision.


To start with, assuming that the data concerning the loss of food is real, several questions have to be raised to evaluate the implications, because the monetary loss of food in absolute term cannot entirely shed light on the two companies’ quality of service. One critical piece of information that is currently lacking is the total value of food stored in both sites. It could be the case that the Palm City warehouse is a huge facility with substantial amount of food, while the storage in unit in Wintervale is dwarf by comparison. In this case, while the losses in Palm City is greater in absolute terms, the relative loss in money in Palm City is smaller than that in Wintervale. In this scenario, the author’s proposal that the company should discontinue its cooperation with F should not be implemented. However, if it turns out that the total monetary value of product at both warehouses was identical or similar, the author’s argument will be strengthened.


Additionally, even if we acknowledge that Palm City warehouse suffered more losses both in absolute and relative terms, in order to accurately compare and contrast the differences in service at the various locations, we need to take into consideration other contributing factors to a higher loss of food in Palm City. First, are the numbers and types of bugs at both locations were similar? If the pest problem at both locations was caused by a relatively similar amount of bugs of the same type, then there would be some accuracy in the company’s claim that the difference in pest damage should be attributed to F and the author’s conclusion is supported. However, if, for example, the amount of bugs at the Palm City location is significantly greater than that of the Wintervale location, then even if the company switches back to B, the loss of food next month will remain constant, thus the author’s conclusion is weakened.


Second, we need more information concerning the locations of each warehouse. If the locations the warehouses are located at are drastically different, this could potentially influence pest conditions, thus affecting the amount of pests needed to be exterminated. If, for example, the Wintervale warehouse is located in a colder city with a more arid climate, the number of bugs in the area would be significantly less than it would be at the Palm City location if the Palm City warehouse were located in a balmy area with higher precipitation levels. If this were the case, changing to B would make no difference, as the difference would then be able to be explained by difference in location, climate, and surroundings. However, if this were not the case and the areas that the warehouses are located at are the same or, for the most part, similar, then the author’s conclusion would gain more strength.


Third, what types of products were stored in each of the different warehouses? Some products, like fresh produce and sugar, attract more bugs than others, like canned goods and dried beans. If the product variety at both warehouses was identical or similar, then there wouldn’t be as much of a need to further consider this aspect; however, if the difference in variety of stock was significant, then the company would benefit from comparing the differences in the stock at both warehouses, then formulating their final conclusion upon this foundation. If there was a relatively large difference in stock variety, then the author’s conclusion will be untenable.


Finally, granted that F was the sole reason why there was such a large difference in the loss of food, we still need to ask whether switching to B is the best way for the company to save money. To be more specific, we need to address two questions: the exact price charged by F and B and the possibilities of an alternative service provider more capable than Fly-Away and Buzzoff. First, the author mentions that the price charged by F is considerably lower, but he does not mention by how much. If B’s service is more expensive than F by more than $10,000, then switching to B is unlikely to lead to considerable money-saving. In addition, there might be potential competitors in the market that could also provide economical and effective pest control. Without looking at these potential alternatives, the author’s endorsement of B is unfounded. Yet, if the author could demonstrate the relative superiority of B in pest control, his advice would be more persuasive.


To conclude, in order to decide whether the recommendation in the argument is reasonable, we need to ask the aforementioned questions and the answers to the questions would contribute to a better evaluation of the proposal.

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